Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The Ogden Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as
The Ogden Company retails two products: a standard and a deluxe version of a luggage carrier. The budgeted income statement for next period is as follows: Data table Standard Carrier Deluxe Carrier Total 176,000 44,000 220,000 Units sold Revenues at $20 and $37 per unit $ 3,520,000 $ 1,628,000 $ 5,148,000 Variable costs at $15 and $17 per unit 2,640,000 748,000 3,388,000 $ 880,000 $ 880,000 Contribution margins at $5 and $20 per unit 1,760,000 1,300,000 Fixed costs $ 460,000 Operating income 1. Compute the breakeven point in units, assuming that the company achieves its planned sales mix. 2. Compute the breakeven point in units (a) if only standard carriers are sold and (b) if only deluxe carriers are sold. 3. Suppose 220,000 units are sold but only 22,000 of them are deluxe. Compute the operating income. Compute the breakeven point in units. Compare your answer with the answer to requirement 1. What is the major lesson of this
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started